Digital: Ops, Nets Common Cause

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There's no question cable operators and programmers are often at odds with each other during contract negotiations-especially when it comes to raising license fees.

But as both sides expand into new business categories, programmers and operators are also trying harder than ever to work together to push new broadband and digital cable services into the home.

In some cases, even competing digital networks would do well to cooperate if it would help drive new-product penetration.

"In digital, because it's a holistic sale, you want to band together and look at how to drive digital boxes in the home," Discovery Networks senior vice president of national accounts Donna Thomas said.

Thomas said that cross-channel spots are key to selling digital. "We have a program to drive people to 'like' programming," Thomas said. Customizable barker spots promoting diginet Discovery Home & Leisure, for example, could run on the Home & Garden Television analog service.

"People tend to go to programming that they want to watch," Thomas said. She added that the beauty of the Discovery barker spots is "the ads have 'digital cable' slapped all over them."

Comcast Cable Communications this past weekend (Nov. 18 and 19) gave analog subscribers in 48 markets a free preview of a number of digital-cable channels.

Programming highlights from diginets Discovery Kids, Discovery Science, BBC America, Noggin, VH1 Classic, VH1 Country, VH1 Soul, MTV S, MTV X, MTV 2 and Sundance Channel were featured Saturday and Sunday nights.

During the event, customers were offered free digital installations and two months digital-cable service for half the regular price. In addition, viewers had a chance to win prizes that included a trip to Sundance Village in Utah, where the promotional screening was taped.

Individual diginets often run their own preview weekends. For example, A & E airs fare from its Biography Channel, while The History Channel previews History Channel International about once a quarter, A & E executive vice president of sales and marketing Ron Schneier said.

Sundance Channel plans to support its January free-preview weekend with ads that also feature its local affiliates'brand, vice president of affiliate and trade marketing Kirk Iwanowski said.

"Branding is very important to them in the age of competition and the age of new technology," Iwanowski said. "We see an increased amount of partnerships between the digital networks and the MSOs."

In support of its free preview weekend, Sundance plans to give away trips to the Sundance Film Festival.

Radio promotions in the 12 top markets will call attention to the sweepstakes.

"This has been a phenomenal growth year for the channel," Iwanowski said. "At the end of the year, we will have doubled our distribution."

Iwanowski said Sundance has been successful in gaining carriage around the country "as one of those premium brands helping to drive digital cable."

Through targeted affiliate campaigns, Sundance is also helping operators to drive cable-modem penetration.

AMAZON.COM CAMPAIGN

Earlier this fall, for instance, Sundance teamed with about 50 local cable systems to give away a $10 gift certificate to Amazon.com. The acquisition campaign was designed to drive both digital cable and high-speed Internet growth.

"We've done a significant amount of research to see who our subscriber is," Iwanowski said. "It's very much along the lines of digital and cable-modem customers. They're ethnically diverse, higher-income, higher-education and tech-savvy."

Time Warner Cable of New York City participated in Sundance Channel's Amazon.com promotion and found it "probably the best [acquisition campaign] we've ever done," Time Warner NYC vice president of strategy and planning Holly Winnick said.

The system's goal was to push both Road Runner and digital cable, and its promotional package highlighted both services. Winnick quoted a 9 percent response rate to a targeted postcard mailing.

"We ended up with a large number of people taking Road Runner-5 percent," Winnick said. Three percent of the target signed for digital cable and another 1 percent for both of the new services.

By comparison, Winnick added, "our best performing campaigns probably had a 5-percent response rate."

Winnick noted that Time Warner of New York City plans to work with Sundance on a future Amazon.com promotion. "We're absolutely thrilled with this campaign," she added.

Next time, Sundance plans to offer creative materials customized with the brands of each operator.

"Affiliates want to send out pieces reflective not only of a specific network, but with the brand of their digital offer," Iwanowski acknowledged.

To participate in the free Amazon.com coupon promotion, Sundance affiliates were required to run 250 cross-channel spots plus direct mail, or 350 cross-channel spots without direct mail. Sundance provided operators with ad slicks, radio scripts and local press releases.

NETS HELP DATA PUSH

Programmers are also doing more to help their affiliates distinguish their high-speed Internet offerings from slower dial-up fare.

Bravo this winter is the fifth programmer to partner in Cox Communications Inc.'s "Cox Line to Learning" campaign, which the MSO launched in 1997 to promote its program of providing cable modems and broadband services to schools.

"The goal was to gain awareness in the community that we're doing this for schools and also that we're providing data services residentially," Cox manager of community relations Kathy McGinty said.

Added Cox vice president of public affairs Ellen East, "We want to provide an opportunity for teachers and students to see what a difference broadband can make over narrowband."

The joint Bravo-Cox campaign is called "Run Away to Cirque du Soleil," and features interaction between students and performers from the production
Dralion
.

Bravo has not yet created other affiliate campaigns involving Cirque du Soleil, according to Bravo Networks director of national accounts and affiliate marketing Krissie Verbic.

"The promotion is exclusive to Cox because it's through their Line to Learning program, and it's through their plant and technology," Verbic added.

At least 11 schools will participate in the live online
Dralion

event, McGinty said, and more will participate in the program at other levels.

"Part of our event will be showcasing our two-way, interactive video," McGinty said. "We'll receive video streams back from our schools."

In past Cox Line to Learning events, students interacted with the programmers' panels either by electronic mail or phone, East said, "but you couldn't see the person asking the questions."

For the January event, Cox will add two-way video capabilities, because the broadband platform is "much more stable than it's been in the past," East explained. In addition, the MSO has received support from computer-system vendors who supplied some of the necessary equipment.

Bravo has been proactive in developing broadband content, Verbic said, and in helping Cox promote its broadband service.

"It is important for us to promote the arts and to work with our affiliates," Verbic said. "It also helps to be promoting one of our key partners on the programming side."

Cox had not conducted an arts-focused Line to Learning program before, McGinty said, but felt Bravo afforded a good chance to discuss careers in the arts and to showcase local arts partnerships.

"We're sponsoring local arts field trips," she added.

WORKING FOR ART'S SAKE

Cox plans to support the campaign in several ways, both in the schools and at home.

Earlier this month, Cox and Bravo sent curriculum materials to participating schools, including discussion topics on how the arts influence the students' lives. The information kit also includes a list of arts-related Web sites at both the national and local levels.

Cox will also provide free Cirque du Soleil screenings from Bravo to subscribers as part of the MSO's "Family Movie Night" events. Cox plans to use the venue to promote a free installation offer for new cable-modem or digital-cable customers. It will promote the Family Movie Night events with cross-channel spots.

In addition, Cox wants to emphasize the role of parents in the Line to Learning program through "Bring Your Parents to School" days, McGinty said.

Cox has created exclusive affiliate marketing promotions with other programmers, including Discovery and its diginets. The MSO is in the midst of its third year of the Cox Kids on Camera campaign, co-sponsored by Discovery.

"The value of a Cox-exclusive promotion is very important to us," Cox CableRep Advertising director of marketing Bobbi Hurt said.

Discovery has also sponsored a number of other initiatives to help drive cable modems and digital cable into homes and classrooms.

A Comcast system in metropolitan Detroit teamed up with Discovery for a "Science Live" event late last year that drew over 300 attendees, Comcast of Southeast Michigan area director of marketing David Bologna said.

Discovery also initiated a direct-mail campaign for Comcast's digital-cable offer in Detroit, using a database of "Discovery like lies" to help pick targets. According to Thomas, the campaign scored a 6-percent overall response rate, and a 9-percent rate among those deemed to have a previous affinity for Discovery programming.

The programmer was looking for a model acquisition campaign to bring to other operators across the country, to see if a single major programming brand could help drive digital penetration.

"We didn't do this when digital was first launched," Thomas said. "The message when digital launches is 'more, more, more,' so there's no need to speak about specific brands."

In the direct-mail campaign, new digital subscribers had a chance to win a choice of four "Discovery Dream Experiences," Discovery director of sales strategy Amy Hauser said. The direct-mail campaign's tagline was "Your Family Will Flip for It," and featured a picture of a remote control.

In its efforts to push digital cable into additional homes, Discovery is going beyond direct mail and cross-channel promotions. The programmer's marketing staff created Discovery-branded digital pop-up booths that affiliates could take to events at fairs or local malls, or anywhere they planned to demonstrate the benefits of digital cable.

Discovery also plans to test digital-cable demonstrations with a Northeastern cable affiliate through its retail arm, Discovery Stores.

A&E's Schneier said it's more important than ever for operators and programmers to work together to create new business opportunities because "our future is such that we can't count on programming [license fees] as the primary source for growth."

Schneier said he would like to form a group of industry operators and programmers to discuss issues related to new technologies, such as interactive television.

"In the end, we're in this together," Schneier said. "We have to really join forces as partners to each other's business in the digital world."

Highlighting coveted digital channels is one way to push digital, Schneier said, adding that A & E's digital brand extensions-the Biography Channel and History Channel International-score well in consumer tests.

"You only get one chance with the digital consumer," Schneier said, "and if they spend $10 extra for a digital box and don't see something they like, they may ask why they're spending more for digital."

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